NCLT Mumbai Admits CIRP Plea Against Baggit India Pvt Ltd Over ₹1.11 Crore Operational Debt

The National Company Law Tribunal (NCLT) at Mumbai had admitted an operational creditor's insolvency petition against Baggit India Private Limited, an Indian handbags and fashion accessories company over a debt of Rs 1,11,84,020.

A coram of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held that the application filed by Sunrise Global Tradelinks was complete in all respects and that default stood established.

“In our view the present Application is complete in all respect. The Applicant has proved before us that an Operational Debt exceeding Rs. One crore is due and payable by the Corporate Debtor to the Operational Creditor and that there has been a default in payment of the same,” the tribunal observed.

Sunrise Global Tradelinks, a proprietary concern engaged in sourcing, import and supply of raw materials used in the manufacturing of handbags and purses, had supplied PVC Leathercloth, Embroidery Strips, Metal Chains, Magnetic Buttons and Polyester Knitted Fabrics pursuant to four purchase orders dated March 15, 2025.

The four purchase orders aggregated to Rs 1,08,29,300. Invoices dated May 1, 2025 were raised for a total of Rs 1,11,84,020.50. The date of default was recorded as May 2, 2025.

The operational creditor issued a reminder dated May 7, 2025 and thereafter served a demand notice under Section 8 of the Insolvency and Bankruptcy Code on July 17, 2025. The notice was served by email on July 17, 2025 and by courier and speed post on July 18, 2025. The corporate debtor did not reply within the statutory period.

In its reply before the tribunal, Baggit contended that goods worth ₹11,94,845 were defective and not fit for use. It stated that it had issued a letter dated August 11, 2025 recording the alleged defects and indicating that debit notes would be issued to adjust the value of the defective consignments. It argued that after such adjustment, the debt would fall below the ₹1 crore threshold prescribed under Section 4 of the Code.

The tribunal noted that the only written document raising dispute was the letter dated August 11, 2025, which was issued after the filing of the petition on July 31, 2025. It further observed that no test reports were filed and no dispute was recorded with NESL.

“Looking at the facts of the case, it appears that the defence of pre-existing dispute as pleaded by the respondent appears to be a moonshine defence,” the coram held.

The tribunal concluded that there was no pre-existing dispute, that the operational debt exceeded Rs 1 crore, and that the claim was within limitation. It accordingly admitted the corporate debtor to the Corporate Insolvency Resolution Process, declared a moratorium under Section 14 of the Code, and appointed Amit Vijay Karia as the Interim Resolution Professional.

The operational creditor was directed to deposit Rs 3 lakhs with the IRP towards initial CIRP costs, to be treated as interim finance.